Research Reports

Updated April 18, 2005 12:01 a.m. ET

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The following companies are subjects of research reports issued recently by investment firms. Many of the reports may be obtained through the company research area of The Wall Street Journal Online at WSJ.com, or are available through Factiva.com. Share prices at the time the report was issued and the date of the report are in parentheses. Some of the reports' issuers have provided, or hope to provide, investment-banking or other services for the companies being analyzed.

CyberSource
(CYBS-NNM) by Barrington Research (April 13, 5.24) We are initiating coverage with an Outperform investment rating and an initial $8.00 to $10.00 price target range. CyberSource, based in Mountain View, Calif., provides secure electronic payment and risk-management solutions to merchants that process orders for goods and services over the Internet. The company's electronic-payment solutions facilitate merchant acceptance of a wide range of online payment options, including credit cards, debit cards, electronic checks and emerging-payment types such as PayPal. CyberSource's risk and compliance-management tools address credit-card fraud, online tax requirements and export controls, while its reporting and management tools facilitate the automation of e-Commerce processes, such as recurring billing. It has a recurring revenue business model that includes transactional and maintenance fees. Its growth is being driven by the secular trend in both domestic and international markets toward increased e-commerce transactions, the complexity of emerging-payment options and efforts to reduce the incidence of fraud in online transactions. CyberSource has a broad suite of products designed for both small and large merchants, with financial institution reseller agreements targeted specifically at the small-merchant market, a blue-chip client base of leading retailers and manufacturers. We believe that CYBS is an early-stage growth company poised to deliver substantial increases in earnings in 2005 and 2006.

Virginia Commerce Bancorp
(VCBI-NNM) by Sandler O'Neill & Partners (April 13, 26.83) Buy, 12-Month Price Target: 32.00. Virginia Commerce Bancorp is a holding company for Virginia Commerce Bank. This state-chartered bank operates 17 offices throughout Northern Virginia and the metropolitan D.C. area. The majority of the bank's loan portfolio consists of construction and commercial real-estate loans, and the clientele includes small to mid-sized businesses, associations, retailers, industrial businesses and consumers. Virginia Commerce reported first-quarter operating EPS of 36 cents per share, a penny higher than our estimate and the consensus estimate. Overall, Virginia Commerce delivered another impressive quarterly showing, highlighted by strong double-digit revenue growth, a 40% annualized increase in loan balances, and pristine credit-quality metrics. In a conference call, management [emphasized] that the pipeline for commercial loan growth remains strong. We continue to view quarterly loan growth in the 25% to 30% range as reasonable for the company, given its niche commercial focus in one of the fastest-growing markets in the U.S. Although the company beat our first-quarter estimate by a penny, we are maintaining our 2005 and 2006 EPS estimates of $1.50 and $1.84, respectively, as we have revised our net interest margin assumption for 2005 downward [from 4.40%] to 4.30% in the second quarter with further declines of 5 basis points in each of the third and fourth quarters, ending the fourth quarter at 4.20%. We consider Virginia Commerce to be a trophy Virginia franchise, planting the seeds today in a high-growth market for sustained peer-beating growth tomorrow.

Manugistics Group
(MANU-NNM) by JMP Securities (April 13, 1.70) Market Perform. Yesterday, Manugistics reported slightly better-than-expected EPS on disappointing revenue. [The company lost three cents a share in its fiscal fourth quarter], in line with our estimate and one cent above the consensus estimate. Total revenue of $45.2 million missed the consensus estimate of $46.9 million. While the top line was disappointing, CEO Joseph Cowan continued to deliver on his commitment of lowering Manugistics' cost structure. We are reducing our FY06 EPS estimate from a loss of four cents a share to a loss of five cents. We are introducing our fiscal 2007 EPS estimate of one cent a share.

Pfizer
(PFE-NYSE) by First Global U.S. Research (April 13, 27.27) Moderate Outperform. Pfizer stock has had a pretty abysmal run for the last few quarters -- along with many other big pharma plays. Our take is that the negatives -- patent expiries, pipeline issues and weak product launches -- have been more than factored in [in] the current price. Its valuation ratios are at multi-year lows. True, Pfizer will not see the kind of sales and earnings growth it has witnessed over the last decade unless it can find reasonably priced acquisitions, as blockbusters become harder to come by. Even so, these negatives are already built into the stock price. Some event risks remain, as was seen with the recent Bextra withdrawal, although most of these risks finally appear to be priced in...unless it is hit by a biggie, like losing the Lipitor litigation. On the other hand, the company has the financial and marketing muscle to acquire/license and/or have strategic tie-ups for outside products, technologies and companies. Management also appears to have a reasonable strategy in place encompassing costs/expense management, a strong pipeline (with 20 filings likely by CY06), growth acquisition and product management....

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